Here’s our 15-minute recap of Thursday’s legislative activities on “Legislative Review.” We have highlights from the House floor debate of the Voting Rights Act. The show also covers a bill that would allow motorcycles in Washington to pass cars on the left side of the left lane on state highways. Plus, debate over a proposal that would end permanent expulsions in public schools.

“Diversity really is a cornerstone of our state, it’s what makes us such a great place to live work and raise our kids,” he said.

On Feb. 15, someone scrawled the words “get out” and a swastika on an exterior wall of the Hindu Temple and Cultural Center in Bothell. Two weeks later, the windows were broken out of the Sanatan Dharma Temple in Kent and the word “FEAR” was written on the wall.

“There are still elements that act as agents of intolerance and hate and we have got to stand up against them every day,” Inslee said. “I am condemning these acts of intolerance, intimidation and violence.”

Inslee also mentioned a recent incident in Pasco, in which a mentally ill man was shot to death by police officers.

“We don’t know yet all the facts behind the shooting death in Pasco and until we do we all will need to remain patient,” he said. “But we do know that some in the community clearly feel marginalized and expressed concerns about whether immigrants who don’t speak English or suffer from mental illness are treated fairly.”

Inslee made his remarks at the start of a press conference that touched a number of topics, including transportation and education. He also spoke with the leaders of the Hindu temples that were targeted and with local Muslim leaders.

Here’s our 15-minute recap of Wednesday’s legislative activities on “Legislative Review.” It includes debate over a bill that would provide low-income students with breakfast after the bell, as well as a measure that would expand dual language programs in Washington schools. Plus, the Senate passes a bill to make changes to the state’s Presidential primary elections.

The tax was debated on a budget panel that included Rep. Ross Hunter (D-Medina), chairman of the House Appropriations Committee; Sen. Andy Hill (R-Redmond) chairman of the Senate Ways and Means Committee; Rep. Bruce Chandler (R-Granger), ranking Republican on the House Appropriations Committee; Sen. Karen Fraser (D-Olympia), member of the Senate Ways and Means Committee.

Inslee last month proposed a $39 billion 2015-17 budget that ends a number of tax breaks, charges carbon polluting companies and raises $800 million over two years through a proposed capital gains tax. The proposed capital gains tax would be 7 percent on money made from the sale of stocks and bonds above $25,000 for individuals and $50,000 for joint filers — which lawmakers say would affect the top 1 percent of earners in Washington state.

Inslee, in his Q&A session, defended his proposal of a capital gains tax, saying it gets the state closer to a system that can get the benefit of people earning more money without also increasing the tax burden on lower-income and middle-income earners.

“If we can tax higher income folks when they get capital gains, and not lower income folks when they buy a pair of shoes, that’s good,” he said.

“Whatever the concerns on the volatility of the capital gains tax, the alternative is zero,” Inslee said.

He said that because the state’s revenue has risen by more than 4 percent in each of the past two years, the state can continue its existing services and put an additional $1 billion in state education funding over two years.

“When I’m talking with business groups, I ask, ‘Would you like 4 percent growth year over year in this economy,’ ” he said. “I see nods. With some I see a little drool.”

“To say we have a huge budget problem, I think it’s meant to scare people,” Hill said. “The next step is you have to raise taxes.”

Hill also said that a capital gains tax is too unpredictable to be a reliable source of funding for school education, which was one of the requirements under the McCleary ruling. (more…)

It wasn’t quite a debate, but the differences were clear in presentations on state legislative priorities given by Sen. Andy Hill (R-Redmond) and Rep. Reuven Carlyle (D-Seattle) at the Washington Policy Center’s Solutions Summit in Bellevue on Wednesday.

“We do not have a brutal deficit,” Hill said. “It’s a false choice to say you raise taxes or you make cuts.”

Carlyle, the House Finance chairman, was critical of Washington’s taxing system as a whole, which he says squeezes middle- and lower-income taxpayers as well as small businesses. But Carlyle was also skeptical of the idea that the spending side of a budget should get the most scrutiny. He said many of the state’s tax exemptions to businesses have not been revisited since they were passed.

“I believe the best tax structure would be low rates, broadly applied with few exemptions,” he said.

The Washington Policy Center, a pro-business think tank, hosted Hill, Carlyle and Sen. Curtis King (R-Yakima) and others in a half-day summit that prepared attendees and other supporters for the 2015 Washington state legislative session. The Bellevue event, which drew 400 people, was the second day of a two-day summit on legislative issues. The first day was held in Kennewick on Tuesday.

Other speakers at the Bellevue event included former Attorney General Rob McKenna, former New York Gov. George Pataki, Forbes columnist and former health care policy advisor to Mitt Romney Avik Roy and a small business panel that included former Starbucks president Howard Behar and restaurateur Taylor Hoang, who owns Pho Cyclo restaurants.

Sen. Curtis King (R-Yakima) speaks at the Washington Policy Center's Solutions Summit in Bellevue on Wednesday.

In a transportation forum, King, the Senate transportation chairman, declined to discuss in detail why lawmakers failed to come up with a transportation package that would pay for major road projects in the last session, but said that going forward, the state needs to consider what projects would make the greatest economic impact to the state as a whole.

“We got to take this limited amount of money and use it to address our problems,” he said. “Bike and ped paths are not our problem… They are nice to have, but not our problem.”

King, who was in the panel with Marc Scribner, a research fellow at the Competitive Enterprise Institute, also criticized cities that make local decisions without considering how transportation will be affected, such as in Seattle, where several projects in the South Lake Union area will bring 44,000 people to the area to live and work and bringing further congestion to the area, he said.

“Because Seattle said, ‘Hey, we’ll let you build those towers,’ is that the state’s problem?” King asked.

Gov. Chris Gregoire signed the final operating budget of her career Wednesday, saying she was pleased that it makes no cuts to education — a feat achieved “by the skin of our teeth.”

But that won’t be possible in the future without a new revenue source, Gregoire warned. It will cost about $1 billion to meet constitutional and “moral” obligations to the K-12 education system alone, she said at the bill signing.

“If anyone understands the harsh reality of the future, it’s me,” she said. “We cannot properly fund education in this state without more money.”

Gregoire said she was disappointed the Legislature didn’t eliminate more tax breaks after she gave them a list of options “as long as the room.” In the end, the Legislature ended a tax deduction that big banks can claim on first-time mortgages. That’s expected to generate about $15 million a year in new revenue, and another $12 million is expected to come from taxes added to roll-your-own cigarettes.

Many lawmakers opposed the roll-your-own measure, saying that it would put store owners out of business who have invested as much as $30,000 in the machines. But Gregoire said it is only right that people pay taxes on the product because “in the end, taxpayers pay the health care costs.”

The budget included several partial vetoes that will bring the ending fund balance down to $311 million. The original budget left about $320 in reserves.

As the Legislative special session spilled into 7-and-a-half hours of overtime over the last 31 days, Gov. Chris Gregoire said she was as “angry” as she’s ever been in her tenure as governor.

“Temperatures were high, emotions were high,” as lawmakers attempted to break a stalemate over the budget, Gregoire said. “It was my most difficult legislative session,” she said.

But in the end, Gregoire said they accomplished something notable: A budget with broad bipartisan support.

In the state Senate, the budget passed with a 44-2 vote; Republican Senators Mike Padden and Cheryl Pflug both voted no. The vote was 64-34 in the House, with eight Republicans joining the Democratic majority to vote yes.

“I don’t recall having a budget passed out of the Washington state Senate with only two no votes,” Gregoire said today at a press conference. “The end product for people of the state of Washington is significantly bipartisan.”

Democrats did not want to cut education or social safety net programs like Disability Lifeline, while Republicans wanted reforms that would make the budget more sustainable long-term, Gregoire said. The budget that the Legislature passed in the early morning hours Wednesday encompasses both demands.

The budget makes no cuts to education and leaves the social safety net largely in tact. It incorporates a handful of reforms, including a constitutional debt limit, changes to the health insurance system for K-12 public school employees, ending some early retirement benefits for state workers and a four-year balanced budget requirement. It uses an accounting maneuver that holds onto the sales tax revenue collected from local governments about a month longer, which boots the state’s cash flow to the tune of about $238 million.

Gregoire said she regrets the state was unable to put more money into funding K-12 education, and she would have also liked to see a larger transportation investment.

The state Legislature passed a supplemental budget and adjourned at 7:30 a.m. this morning after pulling an all-nighter. The Senate passed the budget on a 44-2 vote, while the House voted 64-34. Read more in the AP story here.

Gov. Gregoire released a statement this morning praising lawmakers for their work, saying they came together to balance the budget and on reforms. Gregoire called for an additional one-day special session at midnight Tuesday after the clock ran out on the 30-day special session before lawmakers had come to an agreement.

We’ll have all the highlights of the night’s legislative activities tonight at 6:30 p.m. on a special session edition of Legislative Review.

Lawmakers working toward a midnight deadline cleared another hurdle when the House voted to pass a four-year balanced budget measure with a 79-19 vote.

The bill changed in negotiations from the version that the Senate passed on Monday, which would have required the budget to be in line with the four-year revenue forecast prepared by the Economic and Revenue Forecast Council.

Instead of relying on the revenue forecast — which critics said was too unpredictable — the billassumes 4.5 percent revenue growth each year. That’s a figure that has remained fairly steady since the ’80s, said Rep. Ross Hunter, D-Medina.

“This will enable us to do solid regular planning and not get whip-lashed by large changes in the forecast,” Hunter said.

Rep. Mark Miloscia, D-Federal Way, said he hopes the bill will end the Legislature’s habit of going into multiple special sessions by forcing lawmakers to “look four years into the future for long-term solutions.”

UPDATE: The Senate passed the balanced budget bill with 38-9 vote following remarks by bill sponsor Sen. Jim Kastama, who said it was a good compromise.

Meanwhile, the Senate passed a bill that repeals Initiative 728. Voters approved the initiative in 2000 as a way to reduce classroom sizes, but without a way to fund it. The Legislature has regularly suspended the measure during economic downturns. It also establishes a task force focused on funding basic education.

About Capitol Record

The Capitol Record is TVW's blog about state government. TVW is a non-profit network modeled after C-SPAN, airing gavel-to-gavel coverage of the state Legislature as well as independently produced shows. For comments or questions, e-mail Christina Salerno.